Financial Literacy in Action

Curriculum Area: Algebra and Functions (CA Common Core – High School: Number and Quantity)

Grade Level: Year 12 (Adult Transition Students in California)

Lesson Duration: 30 minutes

Objective

Students will apply real-world mathematical concepts by learning how to calculate interest rates, budgeting, and making informed financial decisions. This lesson aligns with California Common Core Standards for Mathematics (HSN-Q.A.1), where students use quantitative reasoning in real-life applications.

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Materials Needed

• Whiteboard & markers
• Calculators or smartphone calculator apps
• Printed budget templates
• Sample bank loan offers or credit card statements
• Small reward tokens for participation

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Lesson Breakdown

1. Warm-Up Discussion (5 min)

Begin by asking students:

• Why is money management important as an adult?
• Have you ever thought about how interest on loans works?
• What financial decisions will you have to make soon (college, rent, car payments, etc.)?

Write student responses on the board and introduce today’s real-world focus: Smart Money Management.

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2. Understanding Interest & Loans (10 min)

Step 1: Breaking Down Simple and Compound Interest

• Explain the difference between simple interest (fixed rate over time) and compound interest (interest on top of interest).
• Use a relatable example:
  • Simple Interest Example: Borrowing $500 at a 5% annual interest rate for 3 years.
  • Compound Interest Example: A credit card balance growing at a 20% annual interest rate.
• Write the formulas on the board:
  • Simple Interest: I = P × r × t
  • Compound Interest: A = P(1 + r/n)^(nt)
• Ask a student volunteer to use a calculator and solve a basic example in front of the class.

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3. Real-World Budgeting Activity (10 min)

Step 1: Creating a Budget

• Hand out budget worksheets with categories (Rent, Transportation, Food, Entertainment, Emergency Savings).
• Give each student a "salary" of $2,500 per month, then introduce common expenses (rent = $1,200, groceries = $300, etc.).
• Students allocate their budget wisely and calculate leftover amounts.

Step 2: Smart Spending Decisions

• Present different scenarios:
  • Student A spends $200/month on fast food. What happens after 6 months?
  • Student B saves 10% of their paycheck each month—how much after 1 year?
• Compare and discuss smarter financial choices.

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4. Exit Reflection (5 min)

Step 1: Quick Quiz (Oral Responses)

• What happens if you only make the minimum payment on a credit card?
• Why is compound interest great for savings but dangerous for loans?

Step 2: Real-Life Application Prompt

• Ask: What’s one financial habit you want to work on before becoming fully independent?
• Encourage students to share ideas with the class.

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Assessment

Students demonstrate understanding through:
✅ Budgeting decisions in the activity
✅ Correctly calculating simple and compound interest
✅ Verbal responses during discussion

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Teacher Reflection

• Did students engage actively in discussions?
• Were they able to apply mathematics to real-life financial decisions?
• What could be adjusted to make the lesson more impactful?

🌟 Extension Idea: Assign students a real-life “financial challenge” for homework—such as finding a real apartment listing within their assigned budget or calculating how much they would save in a year if they cut one unnecessary expense.

🚀 Why This Stands Out: This lesson not only teaches practical math but also prepares students for real-world financial literacy, an essential skill for adult transition students in California.